Friday, November 30, 2012

After reading this article I couldn't help but think... Why not combine these FHA loan guarantees with a PACE loan? This would certainly satisfy those meshuggeners at Freddie and Fannie right? And you're actually using the FHA program for its intended purpose more or less right? Seems worth a shot.

Do we have to wait for Solar City's IPO to bomb before the get on with fixing PACE? That seems to be the case. If only the DOJ would indict the TPO shmucks. That would send the rats packing.

Thursday, November 29, 2012

According to the EIA, lighting accounts for about 10% of residential electricity use (It's actually 9% to 14% depending on the document). I'm always thinking about self-consumption so my quesiton is... what percentage of this lighting occurs during daylight? I would SWAG for an average distribution of 25/75 to 33/66 day to night.

Why SWAG when you can model? I added a few lines of code to PEPE just now that allows me to estimate the amount of lighting demand in dark vs. sunny hours. Initial results indicate that about 75% of lighting demand occurs when the sun is down compared to 25% when the sun is up. This is only an initial result but I'm going to roll with it.

If LEDs reduce electricity used for lighting by 50% then the share of lighing in overall residential electricity demand goes from 10% down to 5%.

Post-LED Conditions.
Overall household electricity demand is shifted down to 95 kWh/year
Lighting demand makes up 5 kWh/year. 1.25 kWh during daylight and 3.75 kWh when dark. If you assume a worst case scenario 1.25 kWh decrease in daytime self-consumption due to the lost daytime lighting load your total consumption goes down to 48.75 kWh/year but your self-consumtion rate actually climbs to a smidge over 51%.

This is obviously only a sketch based on a preliminary simulation but caveats aside the results show that LEDs will positively complement photoelectrics in a non-negligible way. For me this means PEPE would be improved by adding a few lines of code that simulate how lighting stocks will/can/could change over the lifetime of the modeled photoelectric system. How many dollars is it going to add up to? All by itself it's not much but a little here and a little there adds up.

Tuesday, November 27, 2012

I actually did myhomeworkon the subject more than three years ago and chose a 27-panel (3.9 kilowatt) system for my home in the Ojai Valley.

The total upfront cost was $31,000. I reaped $7,500 in federal taxcreditwith anotherSouthern California Edison$7,500 rebate in the first year. That left me with a total cost of $16,000 installed.

The math... $16,000 after subsidies for a 3.9 kW system works out to about $4/Watt. The Australians, Germans, Flemish, Brits and Italians are currently paying $2 to $3/Watt for unsubsidized photoelectric systems. If Michael from Ojai was willing to pay $4/Watt for a system you'd have to think he would certainly buy again at $2 to $3/Watt. I'd argue that he'd be even prouder of his system for having bought it himself without the aid of Uncle Sam.

The subsidies that Michael took advantage of were training wheel mechanisms that are no longer necessary. The investment has been made and it's paid off. The first movers took the subsidies and the risks of investing in a new technology. The new technology is now a strapping young lad who is ready to go out into the world and prove himself. The First War is won... The Second is coming.

Added weather data from NASA for Monthly Average Temparature, Windspeed and Insolation. I cross referenced the data against a UN LOCODE database to eliminate Data from uninhabited areas. This filtering shrunk the weather database down to about 5 MB.

Yesterday I wrote some water heater energy demand simulation code. The algorithm starts with a water mains temperature simulation that's based on an NREL paper. On top of this sits an EPRI/LBL algorithm that uses household characteristics to statistically estimate daily water demand. Daily water demand, coupled with mains temerature is then used to estimate daily electricity use for water heating. The results are within 10% of where you'd expect them to be... Score...

Started conceptual work on an energy management algorithm. At this point I'm probably only a few hours from having an initial result to a project which has been years in the making.

Guy 2: Yeah... This is my wicked smart fridge... She talks to the internet.

Guy 1: She huh? What do you need that for? *sarcastically* To save the environment?
Guy 2: You know me *holding tree* No... That's not it.
Guy 1: What's the big deal then?
Guy 2: My fridge sends my phone photos of its contents when I'm at the store. How many extra trips do you think that saves me? This beautiful baby can also choose when to run to minimize the cost of electricity she uses.
Guy 1: How's that work?
Guy 2: Beats me... Satellites... Doesn't matter... I like the extra time and money this fridge keeps in my pocket. But check this out. You put your warm beer in the freezer... The camera up there sees it and... BEEP... she tells you when it's cold.
Guy 1: Bullshit.
Guy 2: Seriously.
Guy 1: Whatever... any other fake abilities?
Guy 2: Yeah... Customizable accents... My baby's from Boston.
Guy 1: Double bullshit..
Guy 2: I'm serious. There are all sorts of accents. There's French, British, Brooklyn, Boston, Red Neck, Stephen Hawkings.
Guy 1: You are so fucking full of it.
Guy 2: Ten bucks.

Commercial closes like the end of a TV show. Long break. Commercial comes back for the Easter Egg shot with the guys sitting on the couch watching TV. The phone rings...

Friday, November 23, 2012

Thursday, November 22, 2012

If you assume the average installed cost for a photoelectric system in the US is currently $3/Watt this implies the 30% tax credit costs the government 0.9 $/Watt. Approximately 4.3 GW are expected to be installed in 2012 so assuming a $3/Watt average installed cost the total ITC will cost the Treasury about 4 billion. One way to gradually phase out the ITC would be to set this 4 billion as a step budget that triggered an ITC degression. i.e. You'd get a 5% ITC degression for every 4 billion spent on the program.

First drop would be automatic to 25%. If prices stayed the same at $3/Watt the budget allocations would progress like so.

25% step: 5.3 GW

20% step: 6.7 GW

15% step: 8.9 GW

10% step: 13.3 GW

5% step: 26.7 GW

Experience shows that prices wouldn't stay the same. There's good evidence to suggest that average prices could well come down to $2/Watt. If this happened you'd significantly extend the GW per step.

Tuesday, November 20, 2012

The Germans seem to be stuck on the question of how to deal with the EEG surcharge with their heavy electricity users. Why not set it up such that electricity users pay the full surcharge on the first X GWh per year, a 50% surcharge on the next Y GWh per year and a base surcharge on all consumption above this. If you set up the surcharge apportioning system this way it would prevent companies from inflating their consumption in an attempt to avoid the surcharge.

Monday, November 19, 2012

At the network level the reliability of a solar power forecast should eventually play into new reserve requirement rules. It stands to reason that a solar heavy grid with a cloudy forecast would need to carry a higher reserve percentage than the same grid with a clear sky forecast. Higher reserve requirements mean higher costs.

If end-users manage their loads to avoid cloudy hours that has the effect of dampening demand. Dampened demand counters the upward pressure on prices due to reduced supply.

If loads seek out sunny hours where there's presumably cheaper electricity the increase in demand counters the downward pressure on prices.

These effects balance each other nicely. Solar availability is effectively a proxy for price. You end up with Light Pricing.

Could you use the expected load and price patterns along with unit commitment rules to project which power plants are going to be removed in Power System Jenga? I suspect you could project the next few plants but not too far forward. Not enough is known about load shifting.

It occurs to me you could model a range of scenarios with made up numbers for your load shifting capability. That would be a dangerously fun way to play Power System Jenga far into the future.

Saturday, November 17, 2012

On the walls of my university they had pictures of graduating classes from years gone by. The 60s and 70s had cool hair. It got boring after that. People who have a problem with retard should have someone change their pampers and fuck off. Edison knew how to work.

“Genius is 1 percent inspiration and 99 percent perspiration.”

That quote took a lot of tinkering. The world is full of boundries. Some require strict respect. Others require ridicule. You have to do. I have strange dreams where I'm chased by Irishmen. Armstrong won his tours, Rose belongs in the Hall and Madoff should be hung.

Scheduling loads with an energy management algorithm is like playing a game of Tetris where you have a surface to fill with blocks of various dimensions.

These blocks have a time dimension and a power dimension. Together these dimensions add up to a quantity of energy.

The solar resource is your board. You have an idea of what the board is going to look like based on weather prediction but you don't have perfect information - you only have an estimate.

You have an idea of how accurate your estimate is based on what the estimate actually is. Let's say it's 8 a.m. and your estimate for noon is for a clearness index of .8 (clear sky). Let's assume the error of this prediction is +/- 10%. Alternately, let's say that your clearness index estimate for noon is .5 (cloudy). Your error bounds with a cloudy sky prediction will be more like +/- 30%.

Example: If you estimate having 4 kW to work with in a clear sky situation you plan for 3.6 to 4.4 kW. If you estimate having 2 kW to work with in cloudy weather situation you set your bounds at 1.4 to 2.6 kW.

The reliability of your weather prediction plugs into your energy management decisions. If you have loads with a range of flexibilities you want to assign those flexibilities to counter the unreliability of your weather prediction where possible.

Back to Tetris. The most flexible block you could possibly have would have a 1 x 1 dimension. Blocks of 1 x 2, 1 x 3, 2 x 2 and so on are still flexible but less so. Blocks of 5 x 5 and 10 x 20 are flexible in terms of scheduling but you still have to fill them into the resource frame which is unpredictable.

Your Tetris board fills up unpredictably with unscheduled loads. People turn lights on, cook dinner and watch TV. Your EMS system will make a fuzzy prediction of these unscheduled loads. It will assign error factors to the prediction of unscheduled load just as it assigns error factors to the prediction of weather. Your EMS learns you.

An EMS system will want to scatter flexible load blocks such that the 10 x 20 blocks are matched up to the most reliable predictions, the 5 x 5 blocks are used in the medium error zones and the 1 x 1 blocks are used in the high error zones.

Friday, November 16, 2012

Spiegel recently interviewed the German Energy Agency's head Stephan Kohler. The questions were softballs but I enjoyed the story. The standout point Kohler made was that the expansion of renewables in Germany could not continue in a willy nilly fasion.

Today anyone can build a solar power system wherever he wants. And anyone who owns one of these systems also has the right to be connected to the grid operator. Just take a drive through Bavaria, and you'll see entire fields full of solar power plants, even though there is zero consumption there and there is no grid. Solar systems should be expanded only in places where the electricity is needed and there are grids that can absorb it; in other words, in industrial areas, on stadium roofs and at indoor swimming pools. To that end, I would propose that the grid operators provide a map of available grid capacities.

I agree with his point here but I think he's incorrectly describing the direction of solar development in Germany. It is true that Bavaria's countryside is dotted with solar farms but those farms were the result of past policy. Current FiT policies make it difficult to build solar farms going forward. When I say difficult I mean economically difficult. Between September and October the FiT rates for solar farms fell from18.76 cent/kWh to 13.5 cents/kWh. The much lower FiT suggests Bavaria's countryside will see far fewer solar freckles in the future.

Kohler also takes a shot at rooftop solar.

SPIEGEL: You would get rid of Germany's Renewable Energy Act?

Kohler: It is pure insanity! You put a solar panel system on your roof and, thanks to government guarantees, you don't have to do anything more except make sure that you clean the snow off the panels in the winter. We now have to say to everyone who benefits from this feel-good law: Listen, people, it can't go on this way!"

Ooh la la! An exclamation point... He must mean business... I think Kohler is over-simplifying the issue here and again using past policy to project into the future. As I've repeatedly pointed out here the captive use (AKA: self-consumption) of generation will increasingly become an essential part of operating a photoelectric system profitably in Germany. Raising self-consumption rates will require investment in energy managing equipment. The profit motive may have driven willy nilly expansion in the past but it encourages much more controlled expansion going forward. This will lower the grid costs Kohler is so rightly concerned about. I must say though... It's a pity to see this situation being so grossly mischaracterized by the man who should see it most clearly. Less and less is solar a government promise where benefits accrue thanks to a feel-good law. The government policies have actually worked to build a competitive beast child. More and more is solar an industrial endeavor. Kohler should be able to see the potential. Here's a snippet of Kohler's thoughts on conventional plant dynamics.

We have to make sure that operating power plants remains economically attractive. Nowadays, solar systems are often in operation around noon, when there is high demand for power and the price was high in the past. As a result, conventional power plants can no longer make enough money, which is why existing plants are being shut down and no new ones are being built. Anyone who guarantees the security of supply in the future has to be paid for it, even if his power plant is only needed at certain times.

Again, I can see his point here but I think you need to let the competitive process work itself out. I suspect Kohler is prejudiced to reliability over economics because that's the way grid operators rank the priorities. I'm this way too but that doesn't mean we have to be pussies with the power system. I agree we want to make sure that operating the power system remains attractive overall but that doens't mean all power plants have to be profitable. Imagine a game of Power System Jenga. The objective is to keep the system intact while you remove the least competitive and least structurally important power plants. Power system operators have been playing Power System Jenga for over a 100 years - we're just playing with a more complex structure now. If you decommision a power plant this lowers supply which should then naturally lead to higher prices on the energy exchange. The remaining power plants make a little more money. If more solar comes in you'd expect the extra supply to push down prices until you expose the next weakest link. If it's not structurally essential you remove that link and keep playing the game. It looks as though Kohler is trying to make the point that solar is not only reducing prices but also lowering reliability. Solar, in other words, isn't playing by Hoyle's Handbook on Power System Jenga. There's a pinch of truth and a pile of lie in this position.Solar produces intermittent supply but consider that loads produce intermittent demand. Is the supply of solar more intermittent than the demand from load? Is it technically possible to match up the intermittencies of solar and load such that you get a smoother output which behaves more harmoniously with the existing system? I think so. I also think it's economically desirable. Technically achievable + Economically desirable = Hot Damn!Let me finish by coming back to Kohler's strongest point - the anchor of the interview.

...A grid map would give us the opportunity to control the installation of additional solar systems to minimize additional grid costs. And it would also give us a tool to finally prevent too much power from migrating into the grid. Under the current circumstances, we have to invest about €28 billion ($36 billion) in the distribution grid to integrate renewable energy, while we have entire areas where there is still available grid capacity.

A grid map seems like a fine idea but why not take it one step beyond that and put a locational marginal price (LMP) on electricity that scores the reliability related aspects of the electricity and assigns a price to those aspects. This would give us a better idea of how much renewable energy costs outside of the EEG surcharge. Between a grid map and an LMP signal you not only have a better idea of where to build but you also have a better method of choosing the next coal plant to remove from the Jenga stack.

My car stereo has been on the fritz for the last few days. That means I have no music for my 90 minute drive to work so no singing Darling Nikki or entertaining my fellow travellers with audacious chair dancing moves - shoulder bump, neck wave to the left, snap, shoulder bump, neck wave to the right, snap... screw face... now switch.

Maybe I'm a spider? Maybe I'm a plant?
Or just an eight eyed Roma with an appetite for man
A tasty delicious hunter on a stalk for yummy prey
Hmm... I don't know... Maybe I'll have Chinese for dinner today?

At some point I started thinking about ice boxes. How big was the block of ice? Couldn't be that big. Two liters... maybe four? With PEPE I'm trying to model how load can be shifted from off-sun hours into on-sun hours. I've often wondered why not make a few liters of ice during the day and use the ice to augment cooling after the sun went down. PEPE already runs a basic refrigerator demand model. Today I realized it would be a simple matter to reduce the modelled electricity use at night by a user defined value and shift that into on-sun hours.

Let's imagine a typical home could shift .25 kWh of refrigeration load from off-sun hours to on-sun hours per day. A quarter of a kilowatt hour may not seem like much but consider that this amount of full swing battery capacity would easily cost over $200 and stick you with a 20% energy penalty per cycle just to make sure you don't call back. Another way to think about this .25 kWh is to imagine it multiplied over the 40 million households in a place like Germany. This would add to 10 GWhs a day which could potentially allow for the decommisioning of around 500 MWs of coal capacity. This is only a SWAG but this looks like a pursuable idea to me.

Second idea I had today was to realize it's unnecessary to model hourly hot water usage in PEPE because I can reasonably assume an oversized storage tank. This means I can model for average daily demand with a high degree of charging flexibility - a solid ballpark guess would be 5 kWh of flexible daily load that I can play energy management Tetris with.

Between refrigerators and water heaters it already looks like 45% of the production from a typical 4 kW German photoelectric system could be reliably scheduled for on-site consumption - this is before considering the other controllable loads like dishwashers and laundry appliances. It's starting to feel like 75% self-consumption rates are achievable with residential systems that provide over 50% of total annual load. I've never dared to dream of displacement rates this high.

Finley Colville is one of the truly brilliant minds in solar. Solarbuzz really lucked out when they picked him up. I suspect he's the one who convinced the site to discontinue the bozo pricing tracker they had that had become a viral source of nasty disinformation. But anyways... Finley wrote an interesting article on PVtech today. He lays out a great story but I don't agree with his thesis at the end.

We should see at least 35 GW of installs in 2012. In 2013 we can expect Japan, China, India and the US to easily add 5 GW and maybe 10 GW above the shrink from markets like Germany/Italy. On top of this goes a possible 5 GW of expansion in markets like South America, Africa, the Middle East, Australia and ROW. If we jump up to 45 GW of demand and shave off 5 to 10 GW of legacy non-competitive production we're back to a reasonably balanced supply/demand picture.

The g/Watt angle is interesting but we should never force the market to buy on g/Watt if it means lowering demand by upping the real and/or perceived cost of the thing you ultimately want - the electricity. I want to see photoelectric technology improve just as much as the next guy but picking winners based on technology still involves too much guess work. I want to see a technology roadmap as much as Colville but I don't believe we're quite ready for a roadmap. 2013 will see movement towards a rationalization of policy design in Germany and hopefully Italy and Australia. We have to get the rationalization of policy design on track. Once that happens the big money conglomerates will have the transparency they need to jump in and coordinate on a technology roadmap.

Friday, November 9, 2012

For a realtime German Solar Pricing Update go here. My informal tracking of the site indicates that prices are still trending down sharply - I'm swagging for a Q4 average price of ~1610 Euro/kW and 1525 Euro/kW in Q1.

One of the things I wonder is why continue setting the FiT rates differently between ground and roof-mount systems when there's no longer a significant worry of people over-sizing their systems? It seems this previously useful differentiation should be discontinued. If this happens will average costs change due to the influx of small-ground mount systems entering the mix? Will ground mount DIY systems become the new thing in rural areas? I know I wouldn't want to climb up on my roof to drill holes and set anchors and such but if I had some spare land I'd seriously consider pouring concrete and setting posts for a tinker-toy racking system that came with slap n' snap panels. Call the electrician to do the hot work and bing you're photoelectrified.

Tuesday, November 6, 2012

"And, of course, if you pay higher tariffs in a feed-in tariff system [like Germany] without a cap, you will get more and faster deployment. That’s just common sense."

Be careful what you write on a blank check. It should be common sense to recognize there is a cap on the FiT program in Germany even if the politicians say there isn't. Consumers will only pay so much for electricity, lip stick, stockings, high heels, hand cuffs etc. Had the FiT architects in Germany not lowered the FiT these last three years with extraordinary unplanned cuts we can imagine there would have been an extra 15 GW of photoelectrics installed. If this had occured it would have added another 5 cents/kWh to the electricity price hikes we've seen already - that's 175 Euro per home per year more for electricity. Those extra costs would have tipped many consumers over a threshold from being for the FiT to being against it. Whether today or tomorrow eventually the added costs lead to a backlash and the system breaks. This is how the world works.

The FiTs in Germany and elsewhere have budgets just like the tax equity market in the US and utility level incentive programs in Florida. Once you realize this you can see that carefully lowering the incremental incentive neccessarily leads to more PE if you can keep the investment attractive.

Marx Brothers Break...

If you divide a dividend by a decreasing divisor you get a larger quotient. Myeah see... Wise up... This is child's play for children. Later on there'll be a lesson in multiplication if you know what I mean sweetheart. *wink wink* Skedaddle now you and tell all your friends about it.

The only way to simultaneously lower an incentive and keep the investment attractive is to also lower the costs of the underlying product. Fortunately, the predictions of the learning curve have come through as promised - like magic clockwork. Ultimately the goal is reducing the FiT down to where it doesn't impact budgets much at all. Interestingly enough, the math indicates Germany is now in a position to achieve this. If only this were common sense.

Friday, November 2, 2012

Frankly, I don't want to argue for or against global warming. What has that gotten the world? Empty promises piled high and deep. Studies which when stacked could reach to the moon and back. Meetings in far away lands filled with bureaucrats holding hands. Hmmm... There may be a song in there. At the very least a dirty limerick.

To me, time is better spent fighting against NOx, SOx and Mercury pollution from coal plants which you can measure. Time is better spent mandating CAFE standards which again, can be measured. Time is better spent on informing the public about the benefits of efficiency. Time is better spent in a lot of ways.

Global warming is effectively a side show filled with hysterics on one side who want/need a problem to worry about and peddlers on the other selling the masses their junk. If there's a problem fine... Approach it with calm thinking. Global warming rhetoric is buckshot - a form of media which has turned casual readers/viewers into messy thinkers. The packaging of the problem is problem in itself - it's incredibly unappealing to me.

What is the cause of Global Warming? Everyone says Carbon and I buy that. Where does the Carbon come from? The basic answer is that it comes from burning coal, oil and natural gas to get energy to do stuff.

To me, the solution to Carbon is to get energy from other places. We should focus on finding and exploiting the best places. There's one and only one clear answer... The SUN! Funny that the source of the problem is the source of the solution. Funny that we see it every day and don't think about it. Funny... Yeah... Fucking hilarious.